With technology being an omnipresent element in both our personal and professional lives, it makes sense that discussions concerning technology should be a major topic of discussion in boardrooms. Here are four areas of technology board members will want to address:
1. Cyber Security
This is, or should be, a top boardroom priority. Growing Cyber Security risks like cyber attacks, data theft, and misuse of mobile devices and social media by employees can expose data that is the legal obligation of the company to maintain private. It can compromise the organization’s customer base and expose proprietary and trade secrets of the organization, impacting a company’s competitive advantage.
A data breech in the United States, can cost on average, $188 per stolen or lost record, which translates to approximately $5.4 million per breached organization. Company strategy, aligned with cyber security, and comprehending the risks involved with a company’s asset protection requires that the right people and proper procedures and technology are in place. Funding and efforts should be focused on protecting critical data.
2. Technology innovation
Here are a few examples of the newest technologies that many companies are exploring:
- The Internet of Things (IoT), also known as the Industrial Internet
- Cloud computing
- Additive manufacturing, also known as 3D printing
- Big data & analytics
- Machine learning & artificial intelligence
- Mobile & wearable technologies.
3. Complying with new regulations
Newly developed technologies pose new security risks. It is presumed that a company’s compliance practices can be traced back to its IT department, since many of the laws include personality liability penalties for corporate officers and directors. All the more reason that the Board should be aware of the effectiveness of the compliance measures the company is taking.
The number of laws which govern information security, privacy, etc, can be quite overwhelming, depending on the type of industry in which that particular company operates.
- Create and implement controls
- Maintain, protect, and determine compliance issues
- Identify and repair areas of weakness and deviation
- Provide documentation to prove your organization’s compliance
4. Antiquated systems
Systems that are inflexible and not suited to the demands of the business hold back the productivity efforts of the company. Most boards need to understand of the company’s business-technology gaps better, and what kind of investment would be necessary to update systems to provide better security.
In order for Board members to be in a position to evaluate and decide upon strategies and investments where technology is central, a fundamental change in the boardroom culture is needed.
What is required is a combination of technology expertise with knowledge and insight into the impact of technology on the company among board members. The difficulty is that most boards do not have that expertise and deep knowledge.
Here are some ways to obtain a higher level of technology insight within your organization:
- Seek new board members with an IT background. Many companies have begun to appoint individuals with knowledge of Technology to the board. New thinking about how the board is organization and how they interact with management is necessary.
- Provide technology coaching for Board members. Perhaps an annual report on the how the company’s Technology and it’s infrastructure support the corporate strategy and operations is what is needed for Board members to be better to prepared to advise on strategy.
- Form technology committees. Create a technology-focused committee to conduct frequent discussions on technology topics. These committees would report to and advise the board just like audit and risk committees. They should include independent technology experts to help boards oversee regulatory compliance and monitor progress.
Conclusively, Boards need to be focused on creating a company environment conducive to preparation and accountability. Nowhere is this more critical than within the area of technology.
Stewart, Cooper & Coon, has helped thousands of decision makers and senior executives move up in their careers and achieve significantly improved financial packages within short time frames. Contact Fred Coon – 866-883-4200, Ext. 200